US SEC claims TRX is security, charges Tron’s Justin Sun and eight others
- US SEC has declared TRX and BTT as securities and brought charges against Tron’s founder
- The commission has also claimed the Sun manipulated the price of TRX in the secondary market
The United States Securities and Exchanges Commission (SEC) has taken an action against prominent crypto-entrepreneur – Justin Sun – the founder of Tron (TRX). The commission has also charged eight other celebrities for promoting TRX and BitTorrent token – BTT. The list includes Hollywood star – Lindsay Lohan, influencer – Jake Paul, Austin Mahone, Michele Mason, Aliaune Thiam aka Akon, Shaffer Smith, DeAndre Cortez Way, and Miles Parks McCollum.
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Moreover, the commission has laid charges against Tron Foundation, BitTorrent Foundation, and Rainberry Inc. The charges allege that these entities committed securities fraud by offering an unregistered sale of TRX and BTT. The press release on the same further read,
“The SEC also charged Sun and his companies with fraudulently manipulating the secondary market for TRX through extensive wash trading, which involves the simultaneous or near-simultaneous purchase and sale of a security to make it appear actively traded without an actual change in beneficial ownership…”
Tron’s Justin Sun faces securities law violations and fraud allegations
The SEC states that the head of the Tron foundation offered TRX and BTT via bounty programs, which resulted in people promoting the coin on social media channels. The program also encourages investors to “create BitTorrent accounts in exchange for TRX and BTT distributions”. The charges also allege that the companies and Sun airdropped BTT every month to those who had TRX in their wallets, including US citizens.
Furthermore, the commission claims that Sun manipulated the price of TRX in the secondary market from April 2018 to February 2019. In addition, the Tron creator made a whopping $31 million from the sale of TRX. The complaint said,
“Sun allegedly directed his employees to engage in more than 600,000 wash trades of TRX between two crypto asset trading platform accounts he controlled, with between 4.5 million and 7.4 million TRX wash traded daily. This scheme required a significant supply of TRX, which Sun allegedly provided.”
Notably, among the charged celebrities, six of them have agreed to pay a penalty for promoting the tokens. The ones who are not part of the list are rapper – DeAndre Cortez Way aka Soulja Boy and singer – Austin Mahone. The others have agreed to pay over “$400,000 in disgorgement, interest, and penalties to settle the charges, without admitting or denying the SEC’s findings.”